WellPoint's Shares Drop After Naming Hospital Executive as CEO
WellPoint's decision to name Joseph Swedish, the president and CEO of Livonia, Mich.-based Trinity Health, as CEO did not sit well with investors, as the insurer's shares dropped 4.6 percent yesterday, according to a Wall Street Journal report.
Mr. Swedish does not have previous experience running a health insurer. Instead, the head of the 47-hospital system has spent most of his career at non-profit organizations "with limited exposure to Wall Street," according to the report.
Robert Medway, a managing partner with Royal Capital Management and WellPoint shareholder, said in the report, "The market doesn't like uncertainty, and they don't know much about him." For now, Mr. Medway said he will reserve judgment, as Mr. Swedish's hospital experience may make him the right pick due to the evolving relationship between providers and payors.
Mr. Swedish has said his qualifications and background make him a good fit for Indianapolis-based WellPoint. Equipped with much experience negotiating with health plan executives, Mr. Swedish said he will "have to look in the mirror in a different way" upon assuming his new responsibilities, according to the report.
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